"Nigerian" fraud

1. IntroductionThe number of disclosures received by CTIF-CFI linked to “Nigerian” fraud has remained stable and fairly high in recent years. Even though it is difficult to get an accurate picture of the scope of the phenomenon in Belgium, there are no indications that the growth these fraudulent practices have experienced thanks to the spread of the Internet is already decreasing. It is therefore useful to describe these fraudsters’ modus operandi and the related financial transactions.

2. DescriptionThis fraud originated in Nigeria in the mid-eighties. Even though the phenomenon gradually spread throughout the rest of West Africa, many cases still point to the involvement of Nigerian nationals or to a link to Nigeria in general. The term “Nigerian fraud” is still used, even though the terms “419 fraud”, “Advance Fee Scam” or “Mass Marketing Fraud” are also used. 419 is said to refer to the article of the Nigerian law prohibiting these practices. “Advance Fee” refers to the advances that are to be paid, whereas “Mass Marketing Fraud” refers to the method used to contact victims.

3. Modus operandiThe offenders first try to contact potential victims on a large scale through the Internet or e-mail. The victims get a lucrative offer; this may be a contract, a winning lottery ticket or inheritance that can be claimed. In case of a “romance scam” pictures of handsome men and women taken from the Internet are advertised on dating sites or forums. In case the victim reacts to this first proposal personal information is requested from the victim and additional documents are sent to make the offer more credible. Shortly afterwards the customers are requested to send an advance in order to claim the entire amount, or the “Internet date” suddenly turns out be in need of money. The requests for money continue until the victims get suspicious and stop paying.

4. Characteristics of financial transactions“Nigerian fraud” transactions are mainly carried out using money remittance. In some cases the bank account of an intermediary or accomplice is used. Sometimes the victims inform their bank of the money’s destination when withdrawing cash in order to send the advance using money remittance.

The money for “Nigerian fraud” will generally be sent from North America, Western Europe or the Arabian Peninsula to various countries in West Africa. Especially Nigeria, Côte d’Ivoire, Senegal, Togo, Ghana and Benin are common as a final destination of the money. However, fraudsters increasingly use intermediaries in Western Europe to receive the money and send it on to West Africa. This puts up an additional barrier between the offender and the victim. When these intermediaries are established in Belgium the transactions may be split up in funds received from principals in other Western countries on the one hand and transfers to beneficiaries in West Africa on the other. In case the victim is located in Belgium “Nigerian” fraud may also include transactions to intermediaries in other Western countries, so not only directly to beneficiaries in West African countries.

The number of transactions carried out by the victims of this fraud themselves is usually fairly limited (< 5). Money is sent, either to beneficiaries in the West (intermediaries) or directly to the organizers in West African countries. The amounts are limited to several thousand EUR and transactions rarely go on for more than a month.

The intermediaries in the fraud schemes receive money from principals in other Western countries (victims) and send money to organizers in West Africa. The number of transactions is higher (>10), several principals and beneficiaries in various countries are involved and the period in which transactions are carried out is much longer.

5. ApproachThe organizers of these fraud schemes usually go unpunished because of the transnational nature of “Nigerian” fraud, the high level of anonymity of the Internet, the use of intermediaries and the fact that victims do not always file a complaint out of shame. An efficient approach of the phenomenon mainly has to focus on prevention by informing the public of the characteristics of this fraud. The financial sector can also play a role in this respect.